In summarizing the productivity challenge of today's service-intensive economy, The Conference Board concludes, "Innovation remains a crucial trigger for growth and recovery. But it requires continued investment in capital and labor -- iincluding management and workplace practices, organizational structure, technology applications, and human resource strategies...." What are your company's productivity-enhancing "workplace practices" and "human resource strategies"? The annual employee survey? Your new five-point performance appraisal scale? More likely than not, over the past 12 months your workplace practice of choice has been downsizing. Downsizing often does improve output per hour, but how does it affect growth? The Economist reports that 2008 patent filings, an important indicator of innovation and growth, dropped from a three-year average growth rate of 9.3% to 2.4%. As in past downturns, mass layoffs will likely reduce mid- and long-term productivity by suffocating risk and innovation. What must U.S. companies do to drive productivity and revenue growth? Build and manage a comprehensive, disciplined system for improving workforce capabilities and outputs. Then assign it, with metrics and review dates, to an executive team member. Don't look to HR for a solution; today's HR programs are not designed for productivity improvements. It's time to build a new model that "bends" the curve on workforce productivity. Here are three components to consider.
Effective Executive Teams
Executive team performance may be your organization's biggest productivity lever. Effective executive teams choose a differentiated business strategy and then design an organization that efficiently delivers that strategy. Successful executive teams know the answer to the question, "Are the outputs of our team 'better' than last year?" That answer is knowable. Ask team members to define the four or five outputs for meeting the organization's financial targets. "Create a compelling strategy" might be one. Then have team members define level 1, 2, and 3 performance for each. Finally, as a team, assess performance every six months.